Apartment building turnover illustrates Westbrook’s strong investor market
Courtesy / Structure Media
Barnstead Apartments, a seven-unit apartment building in Westbrook, appreciated in price by $320,000 over the past two years.
A seven-unit apartment building that recently sold in Westbrook appreciated in price from $880,000 to $1.2 million, since it last turned over just two years ago.
“It is a fairly prominent sale in Westbrook,” said Conner Richardson of F. O. Bailey Real Estate, who represented both the buyer and seller in the off-market deal.
1042 Bridgton Rd LLC bought Barnstead Apartments at 1042 Bridgton Road from Anania Properties.
The property was once a working farm, Richardson said. The house was eventually converted into three apartment units and the barn was converted into four.
“It’s not a traditional apartment building because it’s three and four units between two buildings,” he said.
Strong market
The price appreciation, Richardson said, demonstrates a strong investor market and the continuing rise of property values despite an uptick in interest rates. Since late January, Richardson has also brokered sales to investors for an eight-unit and a five-unit in Westbrook.
What’s driving the strong investor market?
“There’s such low inventory for residential rentals, that it’s a really good time to take advantage of the hot market,” he said. “People are willing to pay more for rent than they have at any time in the past, predominantly due to lack of inventory.”
Additionally, he said, it’s relatively easy to add value to apartment buildings, including by raising the rent, even if just a bit.
“So a building that might not have been attractive a couple of years ago is now very attractive, even at today’s higher interest rate,” he said.
The seller
The seller, Anania Properties, is a real estate investment limited liability company. The company bought Barnstead Apartments in August 2021 as a value-add investment, said Richardson.
“I reached out to the listing broker and we were able to put a deal together within a day or two,” he said.
Anania undertook renovations of some individual units, updates of the septic system and the basement, and waterproofing of the foundation, he said.
The buyer
Both seller and buyer are among Richardson’s regular clients. The recent off-market transaction occurred because Richardson was aware that the buyer, a local investor, was looking for investments such as Barnstead Apartments, which offers primarily market-rate units with a couple that are a touch below.
“The buyer is looking for residential units,” he said. “Buildings that are between 5 and 12 units or so are really attractive for them, where they can go in and increase the value of the property with some light renovations.”
Since January, the buyer has acquired 24 units, predominantly in Westbrook, plus an eight-unit building in neighboring Windham.
The buyer plans to undertake further renovations on units that “are in OK condition but not quite up to what the market looks for today in terms of new construction,” said Richardson.
All of the units are occupied.
“The location has been phenomenal because it’s so close to Portland and Windham and it’s on the Route 302 artery,” he said. “It’s on 3.69 acres and has its own parking lot — all off-street parking, which is phenomenal.”
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